Wall Street ends worst two weeks since November

Send by mail :

U.S. stocks closed their worst two-week slide since November with a selloff on Friday as disappointing China growth data sparked worries the global recovery was flagging.

Concerns that Europe's debt crisis was flaring up again added to selling pressure. Sectors taking the hardest hit were those most closely linked to growth, including materials, energy and financials.

The S&P 500 is now down 3.4 percent from this year's closing high, after falling 2.7 percent over the past two weeks.

"Everyone is looking for global growth, but the slowing in China and the rising yields in Europe are creating questions about how strong we might expect it to be," said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. "That's leading to a correction here, with financials especially taking a hit."

The S&P 500 is still up 9 percent so far in 2012, but fell 2 percent over the week. The Dow lost 1.6 percent for the week and the Nasdaq dropped 2.2 percent.

This week's losses came on top of the slide in the previous week, which was cut short a day for the Good Friday holiday. In that week, the Dow dropped 1.1 percent, while the S&P 500 slipped 0.7 percent and the Nasdaq shed 0.4 percent.

For both the Dow industrials and the benchmark S&P 500, this was the worst two-week percentage drop since late November.

In the previous two sessions of back-to-back gains, the S&P 500 had added 2.1 percent as immediate concerns about rising yields in Spain and Italy ebbed and on bets that the Chinese GDP data would surprise on the upside.

Google Inc (>> Google Inc) slid 4.1 percent to $624.60 a day after reporting a second straight slip in search advertising rates, though it also posted a first-quarter profit that beat expectations.

With 6 percent of the S&P 500 components having reported results, three-fourths of companies have reported profits that topped expectations.

"So far, so good with earnings, but expectations have been low, and it's far too early to tell what the season will be like as a whole," said David Kelly, chief market strategist for JPMorgan Funds in New York. "It's understandable people want to take profits right now, especially given how much we're up this year."

Adding to concerns, two U.S. reports on Friday sent mixed signals to the Federal Reserve about how much room there might be to bolster economic growth.

The U.S. Consumer Price Index rose modestly in March among signs that a surge in gasoline costs was ebbing, but inflation still outpaced workers' earnings and threatened to undermine spending.

The Thomson Reuters/University of Michigan survey showed U.S. consumer sentiment slipping modestly in early April as higher gasoline prices hit household budgets even as optimism about the economic outlook lifted consumers' expectations.

Almost three-fourths of stocks traded on both the New York Stock Exchange and Nasdaq closed lower. Volume was light, with about 6.07 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.